Intrinsyc Disappointed by App Store Sales

In its financial earnings for the second quarter 2010, Intrinsyc, the owner of the GPS navigation brand Destinator, disclosed its disappointment about its navigation software sales on App stores.

“We have yet to achieve significant sales of Destinator in North America through application stores as this is a very crowded and competitive market. We have slightly better, yet still disappointing performance in the European and Australia markets. In May, we launched Destinator in conjunction with our partners, Movix and Apontador, in the Brazil market. The Brazil market has been our most successful.”

As a matter of fact, Destinator was very late to ship its product for the Apple App store where the competition is raging especially on the Western Europe and North American markets.

Adding to that, “Destinator revenue from our OEM customers was down slightly in the quarter”, wrote Intrinsyc CEO Tracy Rees. However, we are working with some of our OEM customers as they implement initiatives to expand to new geographic regions and we expect improvement in the third and fourth quarter due to this expansion effort and better seasonal sales trends. Another important measurement was our ability to add new customers for our Destinator software. We were pleased to sign four new Software License Agreements (SLAs) for Destinator during the quarter: Nanovision, for an in-dash navigation system in an electric automobile from Coda Automotive, and SP By Design, Rydeen Mobile Electronics, and Echomaster for use in personal navigation devices.”

During the second quarter 2010 Intrinsyc revenue from software products - consisting of Destinator as well as other non-navigation product lines Soleus and EIS – was $1.1 million against $2.1 million the same quarter the previous year.

Intrinsyc acquired Destinator Technologies in July 2008 for $16 million in cash and equity with the idea to turn around a company that was over staffed (150 people) and had a revenue of $10 million (in year 2007). However, in cutting in the staff on pay roll they likely cut too much: over the months most of the sales and marketing team was fired or left and the Israel-based research and development center was closed down which led to the results we see today.